[Good space policy requires] smarter regulation to encourage
entrepreneurship and accept risk. For instance, current law
prevents the Federal Aviation Administration’s Office of Space
Transportation (FAA-AST) from regulating the safety of passengers
aboard spacecraft; it is constrained to regulating only those
issues that affect uninvolved third parties.

The hand of the state has rested lightly on the space industry
so far, thanks to that 2004 law, which imposed an eight-year
moratorium on regulation. The view at the time was that until
private space passenger vehicles actually took flight, the industry
was too poorly understood to intelligently regulate. The moratorium
is about to expire, and the House is willing to extend it to cover
another eight years after flights begin. But the Senate is
resisting the extension, demanding stricter regulation while
simultaneously seeking to cut the budget of the FAA-AST. If the
stalemate continues, the industry could wind up regulated out of
existence before it even gets off the ground.

This FAA policy was hard won and may now be in jeopardy if
politicians get in the mood to Do Something.